Gov Capital Investor Blog

Helpful Tips in Cryptocurrency Investments

Over the weeks, questions have been posted on our site regarding the right cryptocurrency to invest. We all know that crypto market has been crazy, new projects launched that don’t give any value in the market.

As usual only those coins with strong foundations survive in the market.So before deciding to invest your money with cryptocurrency, allow us to share some of our helpful tips gathered from well-known experts in the cryptocurrency investment.

Understand the project – ask yourself on “what is this project for?” you need to understand why a project was created or what was it for? Let us use BTC (Bitcoin), it was presented as cryptocurrency in the community that offers anonymity, minimal fees, immutable ledger and instant transactions.

Market Value – Remember that you are investing, and by definition “act of committing money” therefore you are expecting something in return or profit from it. So when you plan to invest in a certain digital currency, the importance of thinking the possible outcome of its value in the future should be considered.

Let us use Etherium and Dogecoin as our real example. Etherium (ETH) has a clearer value. This coin is used in executing and implementing smart contracts on Ethereum network. Therefore the value is backed by these ETH contracts.

On the other hand Dogecoin (DOGE), created as “parody” coin. Its value is derived from people’s perception. Frankly, Dogecoin has no purpose in particular. Even no advancements and not a solution to the real problem. Lastly, it was not updated for 2 years.

Therefore, it is obvious on which coin brings you return in short-term, but the risk of loss is higher once crash comes.

Transparency and Development Team – knowing the team on a project you are to invest is very important. Taking into consideration this helps you gain confidence of where your investments go. A good example for this one is Enjin (ENJ). The team have been engage in the gaming industry, therefore they have the understanding to launch game related projects.

Partners and Investors – identifying these two are important before deciding to invest in cryptocurrency. There is no need to expand the statement, but having an established partners and entities gives security and legitimacy.

The tips aforementioned are backed by research when you determine the right project to invest in. We cannot highlight the significance on which platform you decided to invest, but this will give you an idea where you should be investing. Picking the “hottest” crypto coin in the market could be a short-term gain, but for long term investment you need to undergo proper analysis.